A newly developed coastal model, FESOM-C, based on three-dimensional unstructured meshes and finite volume, is applied to simulate the dynamics of the southeastern North Sea. Variable horizontal resolution enables coarse meshes in the open sea with refined meshes in shallow areas including the Wadden Sea and estuaries to resolve important small-scale processes such as wetting and drying, sub-mesoscale eddies, and the dynamics of steep coastal fronts. Model results for a simulation of the period from January 2010 to December 2014 agree reasonably well with data from numerous regional autonomous observation stations with high temporal and spatial resolutions, as well as with data from FerryBoxes and glider expeditions. Analyzing numerical solution convergence on meshes of different horizontal resolutions allows us to identify areas where high mesh resolution (wetting and drying zones and shallow areas) and low mesh resolution (open boundary, open sea, and deep regions) are optimal for numerical simulations.